AOL sells 800 patents to Microsoft in $1.06 billion deal

View full sizeThe Associated PressAOL Chairman and Chief Executive Tim Armstrong, shown here in March 2011, said the patent deal with Microsoft will allow the company to open up more cash for its shareholders.

After
the sale, AOL said it will still hold over 300 patents and applications
covering a variety of core and strategic technologies including
advertising, search, content generation, social networking, mapping,
multimedia, and security among others.

AOL also received a license to the patents being sold to Redmond, Wash.-based Microsoft Corp.

Tim
Armstrong, AOL's chairman and chief executive, said the deal with
Microsoft resulted from a "robust" auction of the company's patents. He
said the company's license agreement with Microsoft shows that it still
holds a valuable patent portfolio.

"The combined sale and
licensing arrangement unlocks current dollar value for our shareholders
and enables AOL to continue to aggressively execute on our strategy to
create long-term shareholder value," Amstrong said in a statement.

AOL
said it will determine the best way to distribute a "significant
portion" of the sale proceeds to shareholders before the sale closes,
which is expected to happen by the end of this year.